LEASE AGREEMENT
THIS LEASE (the "Lease") is executed this 23 day of December 1999, by
and between DUKE-WEEKS REALTY LIMITED PARTNERSHIP, an Indiana limited
partnership ("Landlord"), and INTERNATIONALE SHOPPING ALLIANCE, Inc.
(doing business as XXXXXXXXXXXXXX.XXX), a Minnesota corporation ("Tenant").
WITNESSETH:
ARTICLE 1 - LEASE OF PREMISES
SECTION 1.1. BASIC LEASE PROVISIONS AND DEFINITIONS.
A. Leased Premises (shown outlined on EXHIBIT A attached hereto): Apollo
Industrial Center II; 000 Xxxxxx Xx., Xxxxx, Xxxxxxxxx 00000; (the
"Building");
B. Rentable Area: 70,089 square feet;
Landlord shall use commercially reasonable standards, consistently
applied, in determining the Rentable Area and the rentable area of the
Building. Landlord's determination of Rentable Area shall conclusively
be deemed correct for all purposes hereunder.
C. Tenant's Proportionate Share: 100%
D. Minimum Annual Rent:
Years 1 $397,458.00 per year
Years 2 - 3 $436,428.00 per year
Years 4 - 6 $453,948.00 per year
Years 7 - 8 $471,480.00 per year
E. Monthly Rental Installments:
Months 1 - 6 $ 32,039.00 per month
Months 7 - 12 $ 34,204.00 per month
Months 13 - 36 $ 36,369.00 per month
Months 37 - 72 $ 37,829.00 per month
Months 73 - 96 $ 39,290.00 per month
F. Landlord's Share of Expenses: N/A
G. Lease Term: Eight (8) years
H. Target Commencement Date: March 1, 2000.
I. Security Deposit: $10,000.00
J. Guarantor: ISA Internationale Inc., a Delaware corporation
K. Broker: Duke-Weeks Realty Limited Partnership representing Landlord
L. Permitted Use: Operation and administration of a home shopping network
and related purposes
M. Addresses for notices:
Landlord: Duke-Weeks Realty Limited Partnership
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Tenant XxxxxxxxxxxxXX.xxx, Inc.
Prior to 0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Commencement Date: Xxxxx, XX 00000
Tenant XxxxxxxxxxxxXX.xxx, Inc.
After ______________________________
Commencement Date: Eagan, MN ___________
Address for rental and other payments:
Duke-Weeks Realty Limited Partnership
NW 7210
X.X. Xxx 0000
Xxxxxxxxxxx, XX 00000-0000
SECTION 1.2. LEASED PREMISES. Landlord hereby leases to Tenant and Tenant leases
from Landlord, under the terms and conditions herein, the Leased Premises.
ARTICLE 2 - TERM AND POSSESSION
SECTION 2.1. TERM. The term of this Lease ("Lease Term") shall be for the
period of time and shall commence on (i) the Target Commencement Date described
in the Basic Lease Provisions; (ii) such later date upon which the tenant
improvements described in Section 2.2 hereof are substantially completed, except
for minor punchlist items, provided, however, that such date shall not be
extended as a result of any Tenant caused delays or delays attributable to
Tenant requested change orders; or (iii) upon such earlier date as Tenant begins
conduct of its business in all or substantially all of the Leased Premises (the
"Commencement Date"). Upon delivery of possession of the Leased Premises to
Tenant, Tenant shall execute a letter of understanding acknowledging (i) the
Commencement Date of this Lease, and (ii) that Tenant has accepted the Leased
Premises. If Tenant takes possession of and occupies the Leased Premises, Tenant
shall
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be deemed to have accepted the Leased Premises and that the condition of the
Leased Premises and the Building was at the time satisfactory and in
conformity with the provisions of this Lease in all respects, subject to
punchlist items which are identified in a joint inspection of the Leased
Premises by both Landlord and Tenant and subject to latent defects which
Tenant notifies Landlord of in writing within one (1) year of the
Commencement Date.
SECTION 2.2. CONSTRUCTION OF TENANT IMPROVEMENTS. Tenant acknowledges
that, except as specifically provided in this Lease, Landlord has made no
representation or warranty of any kind except to construct in a good and
workmanlike manner the improvements as per Tenant's plans and specifications
which shall be mutually agreed upon by both Landlord and Tenant and attached
hereto as EXHIBIT B. Landlord hereby agrees to contribute an amount not to
exceed Six Hundred Forty Thousand Dollars ($640,000.00) ("Landlord's Allowance")
towards the cost of the tenant finish improvements. Any and all costs for tenant
finish improvements which exceed Landlord's Allowance shall be amortized over
the Lease Term at twelve percent (12%) interest per annum and paid by Tenant in
equal monthly installments as additional rent, at the same time and in the same
manner as Tenant's Monthly Rental Installments. Tenant shall have eighteen (18)
months from the Commencement Date to utilize Landlord's Allowance towards tenant
finish improvement costs. Any unused portion of Landlord's Allowance shall be
forfeited upon expiration of the eighteenth (18th) month of the Lease Term.
Landlord and Tenant agree that all work on the initial and any subsequent tenant
finish improvements shall be performed by Duke Construction Limited Partnership
or a subsidiary or affiliate of Landlord which shall receive a construction
management fee as Landlord's construction manager or general contractor.
SECTION 2.3. SURRENDER OF THE PREMISES. Upon the expiration or earlier
termination of this Lease, Tenant shall immediately surrender the Leased
Premises to Landlord in broom-clean condition and in good condition and repair.
Tenant shall also remove its personal property, trade fixtures and any of
Tenant's alterations designated by Landlord at the time of installation,
promptly repair any damage caused by such removal, and restore the Leased
Premises to the condition existing upon the Commencement Date, reasonable wear
and tear excepted. If Tenant fails to do so, Landlord may restore the Leased
Premises to such condition at Tenant's expense, Landlord may cause all of said
property to be removed at Tenant's expense, and Tenant hereby agrees to pay all
the costs and expenses thereby reasonably incurred. All Tenant property which is
not removed at the time of expiration or earlier termination of this Lease and
within ten (10) days following Landlord's written demand therefor shall be
conclusively deemed to have been abandoned by Tenant, and Landlord shall be
entitled to dispose of such property at Tenant's cost without thereby incurring
any liability to Tenant. The provisions of this section shall survive the
expiration or other termination of this Lease.
SECTION 2.4. HOLDING OVER. If Tenant retains possession of the Leased
Premises after the expiration or earlier termination of this Lease, Tenant shall
become a tenant from month to month at one hundred fifty percent (150%) of the
Monthly Rental Installment in effect at the end of the Lease Term, and otherwise
upon the terms, covenants and conditions herein specified, so far as applicable.
Acceptance by Landlord of rent in such event shall not result in a renewal of
this Lease, and Tenant shall vacate and surrender the Leased Premises to
Landlord upon Tenant being given thirty (30) days' prior written notice from
Landlord to vacate whether or not said
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notice is given on the rent paying date. This Section 2.4 shall in no way
constitute a consent by Landlord to any holding over by Tenant upon the
expiration or earlier termination of this Lease, nor limit Landlord's
remedies in such event.
ARTICLE 3 - RENT
SECTION 3.1. BASE RENT. Tenant shall pay to Landlord the Minimum Annual
Rent in the Monthly Rental Installments, in advance, without deduction or
offset, beginning on the Commencement Date and on or before the first day of
each and every calendar month thereafter during the Lease Term. The Monthly
Rental Installment for partial calendar months shall be prorated.
SECTION 3.2. ADDITIONAL RENT. In addition to the Minimum Annual Rent,
Tenant shall pay to Landlord for each calendar year during the Lease Term as
"Additional Rent," Tenant's Proportionate Share of all costs and expenses
incurred by Landlord during the Lease Term for Real Estate Taxes and Operating
Expenses for the Building and common areas (collectively "Common Area Charges").
"Operating Expenses" shall mean all of Landlord's expenses for
operation, repair, replacement and maintenance to keep the Building and common
areas in good order, condition and repair (including all additional direct costs
and expenses of operation and maintenance of the Building which Landlord
reasonably determines it would have paid or incurred during such year if the
Building had been fully occupied), including, but not limited to, service and
other charges incurred in the operation and maintenance of the electrical
systems, heating, ventilation and air conditioning systems and sprinkler and
plumbing systems; management or administrative fees; utilities; stormwater
discharge fees; license, permit, inspection and other fees; fees and assessments
imposed by any covenants or owners' association; security services; insurance
premiums and deductibles; and maintenance, repair and replacement of the
driveways, parking areas (including snow removal), exterior lighting, landscaped
areas, walkways, curbs, drainage strips, sewer lines, exterior walls,
foundation, structural frame, roof and gutters. The cost of any capital
improvement shall be amortized over the useful life of such improvement (as
reasonably determined by Landlord), and only the amortized portion shall be
included in Operating Expenses.
"Real Estate Taxes" shall include any form of real estate tax or
assessment or service payments in lieu thereof, and any license fee, commercial
rental tax, improvement bond or other similar charge or tax (other than
inheritance, personal income or estate taxes) imposed upon the Building or
common areas (or against Landlord's business of leasing the Building) by any
authority having the power to so charge or tax, together with the reasonable
actual costs and expenses of contesting the validity or amount of Real Estate
Taxes or, if such contesting work is performed by Landlord's in-house counsel,
which may be calculated as if such contesting work had been performed on a
contingent fee basis (provided, however, that said fees are reasonably
comparable to the fees charged for similar services by others not affiliated
with Landlord, but in no event shall fees exceed thirty-three percent (33%) of
the good faith estimated tax savings). Additionally, Tenant shall pay, prior to
delinquency, all taxes assessed against and levied upon
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trade fixtures, furnishings, equipment and all personal property of Tenant
contained in the Leased Premises.
SECTION 3.3. PAYMENT OF ADDITIONAL RENT. Landlord shall estimate the
total amount of Additional Rent to be paid by Tenant during each calendar year
of the Lease Term, pro-rated for any partial years. Commencing on the
Commencement Date, Tenant shall pay to Landlord each month, at the same time the
Monthly Rental Installment is due, an amount equal to one-twelfth (1/12) of the
estimated Additional Rent for such year. Within a reasonable time after the end
of each calendar year, Landlord shall submit to Tenant a statement of the actual
amount of such Additional Rent and within thirty (30) days after receipt of such
statement, Tenant shall pay any deficiency between the actual amount owed and
the estimates paid during such calendar year. In the event of overpayment,
Landlord shall credit the amount of such overpayment toward the next
installments of Minimum Rent.
SECTION 3.4. LATE CHARGES. Tenant acknowledges that Landlord shall
incur certain additional unanticipated administrative and legal costs and
expenses if Tenant fails to timely pay any payment required hereunder.
Therefore, in addition to the other remedies available to Landlord hereunder, if
any payment required to be paid by Tenant to Landlord hereunder shall become
overdue, such unpaid amount shall bear interest from the due date thereof to the
date of payment at the prime rate (as reported in the Wall Street Journal) of
interest ("Prime Rate") plus six percent (6%) per annum. Notwithstanding the
foregoing sentence, Landlord shall provide Tenant with a written courtesy notice
of such default and Tenant shall have an additional five (5) days to cure such
default before Landlord imposes such late charge; provided, however, that
Landlord shall not be required to give such courtesy notice more than one (1)
time with respect to any particular default, nor more than two (2) times in any
consecutive twelve (12) month period with respect to any payment defaults in the
aggregate.
ARTICLE 4 - SECURITY DEPOSIT
Tenant shall deposit with Landlord on or before February 1, 2000, the Security
Deposit as security for the performance by Tenant of all of Tenant's obligations
contained in this Lease. In the event of a default by Tenant Landlord may apply
all or any part of the Security Deposit to cure all or any part of such default;
and Tenant agrees to promptly, upon demand, deposit such additional sum with
Landlord as may be required to maintain the full amount of the Security Deposit.
All sums held by Landlord pursuant to this section shall be without interest. At
the end of the Lease Term, provided that there is then no uncured default,
Landlord shall return the Security Deposit to Tenant.
ARTICLE 5 - USE
SECTION 5.1. USE OF LEASED PREMISES. The Leased Premises are to be used by
Tenant solely for the Permitted Use and for no other purposes without the prior
written consent of Landlord.
SECTION 5.2. COVENANTS OF TENANT REGARDING USE. Tenant shall (i) use
and maintain the Leased Premises and conduct its business thereon in a safe,
careful, reputable and lawful manner,
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(ii) comply with all laws, rules, regulations, orders, ordinances, directions
and requirements of any governmental authority or agency, now in force or
which may hereafter be in force, including without limitation those which
shall impose upon Landlord or Tenant any duty with respect to or triggered by
a change in the use or occupation of, or any improvement or alteration to,
the Leased Premises, and (iii) comply with and obey all reasonable directions
of the Landlord, including any rules and regulations that may be adopted by
Landlord from time to time. Tenant shall not do or permit anything to be done
in or about the Leased Premises or common areas which constitutes a nuisance
or which interferes with the rights of other tenants or injures or annoys
them. Landlord shall not be responsible to Tenant for the nonperformance by
any other tenant or occupant of the Building of its lease or of any rules and
regulations. Tenant shall not overload the floors of the Leased Premises. All
damage to the floor, structure or foundation of the Building due to improper
positioning or storage of items or materials shall be repaired by Landlord at
the sole expense of Tenant, who shall reimburse Landlord immediately therefor
upon demand. Tenant shall not use the Leased Premises, or allow the Leased
Premises to be used, for any purpose or in any manner which would invalidate
any policy of insurance now or hereafter carried on the Building or increase
the rate of premiums payable on any such insurance policy unless Tenant
reimburses Landlord as Additional Rent for any increase in premiums charged.
SECTION 5.3. LANDLORD'S RIGHTS REGARDING USE. In addition to the rights
specified elsewhere in this Lease, Landlord shall have the following rights
regarding the use of the Leased Premises or the common areas, each of which may
be exercised without notice or liability to Tenant and which shall have no
material adverse affect on the use or access to the Leased Premises by Tenant
(a) Landlord may install such signs, advertisements, notices or tenant
identification information as it shall deem necessary or proper; (b) Landlord
shall have the right at any time to control, change or otherwise alter the
common areas as it shall deem necessary or proper; and (c) Landlord or
Landlord's agent shall be permitted to inspect or examine the Leased Premises at
any reasonable time upon reasonable notice (except in an emergency when no
notice shall be required), and Landlord shall have the right to make any repairs
to the Leased Premises which are necessary for its preservation; provided,
however, that any repairs made by Landlord shall be at Tenant's expense, except
as provided in Section 7.1 hereof. Landlord shall incur no liability to Tenant
for such entry, nor shall such entry constitute an eviction of Tenant or a
termination of this Lease, or entitle Tenant to any abatement of rent therefor.
ARTICLE 6 - UTILITIES AND SERVICES
Tenant shall obtain in its own name and pay directly to the appropriate supplier
the cost of all utilities and services serving the Leased Premises. However, if
any services or utilities are jointly metered with other property, Landlord
shall make a reasonable determination of Tenant's proportionate share of the
cost of such utilities and services (at rates that would have been payable if
such utilities and services had been directly billed by the utilities or
services provided to Tenant) and Tenant shall pay such share to Landlord within
fifteen (15) days after receipt of Landlord's written statement. Landlord shall
not be liable in damages or otherwise for any failure or interruption of any
utility or other building service and no such failure or interruption shall
entitle Tenant to terminate this Lease or withhold sums due hereunder. In the
event of utility "deregulation," Landlord may choose the service provider.
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ARTICLE 7 - MAINTENANCE AND REPAIRS
SECTION 7.1 LANDLORD'S RESPONSIBILITY. During the term of this Lease, Landlord
shall maintain in good condition and repair, and replace as necessary, the
electrical systems, heating and air conditioning systems, sprinkler and plumbing
systems, roof, exterior walls, foundation and structural frame of the Building
and the parking and landscaped areas, the costs of which shall be included in
Operating Expenses; provided, however, that to the extent any of the foregoing
items require repair because of the negligence, misuse, or default of Tenant,
its employees, agents, customers or invitees, Landlord shall make such repairs
solely at Tenant's expense.
SECTION 7.2. ALTERATIONS. Tenant shall not permit alterations in or to
the Leased Premises unless and until the plans have been approved by Landlord in
writing. As a condition of such approval, Landlord may require Tenant to remove
the alterations and restore the Leased Premises upon termination of this Lease;
otherwise, all such alterations shall at Landlord's option become a part of the
realty and the property of Landlord, and shall not be removed by Tenant. Tenant
shall ensure that all alterations shall be made in accordance with all
applicable laws, regulations and building codes, in a good and workmanlike
manner and of quality equal to or better than the original construction of the
Building. No person shall be entitled to any lien derived through or under
Tenant for any labor or material furnished to the Leased Premises at the request
of Tenant, and nothing in this Lease shall be construed to constitute a consent
by Landlord to the creation of any lien. If any lien is filed against the Leased
Premises for work claimed to have been done for or material claimed to have been
furnished to Tenant, Tenant shall cause such lien to be discharged of record
within thirty (30) days after filing. Tenant shall indemnify Landlord from all
costs, losses, expenses and attorneys' fees in connection with any construction
or alteration and any related lien.
ARTICLE 8 - CASUALTY
SECTION 8.1. CASUALTY. In the event of total or partial destruction of the
Building or the Leased Premises by fire or other casualty, Landlord agrees to
promptly restore and repair same; provided, however, Landlord's obligation
hereunder shall be limited to the reconstruction of such of the tenant finish
improvements as were originally made by Landlord, if any. Rent shall
proportionately xxxxx during the time that the Leased Premises or part thereof
are unusable because of any such damage. Notwithstanding the foregoing, if the
Leased Premises are (i) so destroyed that they cannot be or are not repaired or
rebuilt within one hundred eighty (180) days from the casualty date; or (ii)
destroyed by a casualty which is not covered by the insurance required hereunder
or, if covered, such insurance proceeds are not released by any mortgagee
entitled thereto or are insufficient to rebuild the Building and the Leased
Premises; then, in case of a clause (i) casualty, either Landlord or Tenant may,
or, in the case of a clause (ii) casualty, then Landlord may, upon thirty (30)
days' written notice to the other party, terminate this Lease with respect to
matters thereafter accruing.
SECTION 8.2. ALL RISK COVERAGE INSURANCE. During the Lease Term,
Landlord shall maintain all risk coverage insurance on the Building, but shall
not protect Tenant's property on the Leased Premises; and, notwithstanding the
provisions of Section 9.1, Landlord shall not be
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liable for any damage to Tenant's property, regardless of cause, including
the negligence of Landlord and its employees, agents and invitees. Tenant
hereby expressly waives any right of recovery against Landlord for damage to
any property of Tenant located in or about the Leased Premises, however
caused, including the negligence of Landlord and its employees, agents and
invitees. Notwithstanding the provisions of Section 9.1 below, Landlord
hereby expressly waives any rights of recovery against Tenant for damage to
the Leased Premises or the Building which is required by this Lease to be
insured against under Landlord's all risk coverage insurance. All insurance
policies maintained by Landlord or Tenant as provided in this Lease shall
contain an agreement by the insurer waiving the insurer's right of
subrogation against the other party to this Lease.
ARTICLE 9 - LIABILITY INSURANCE
SECTION 9.1. TENANT'S RESPONSIBILITY. Landlord shall not be liable to Tenant or
to any other person for (i) damage to property or injury or death to persons due
to the condition of the Leased Premises, the Building or the common areas, or
(ii) the occurrence of any accident in or about the Leased Premises or the
common areas, or (iii) any act or neglect of Tenant or any other tenant or
occupant of the Building or of any other person, except to the extent such
damage, injury or death is directly the result of Landlord's negligence or
willful misconduct; and Tenant hereby releases Landlord from any and all
liability for the same. Tenant shall be liable for, and shall indemnify and
defend Landlord from, any and all liability for (i) any act or neglect of Tenant
and any person coming on the Leased Premises or common areas by the license of
Tenant, express or implied, (ii) any damage to the Leased Premises, and (iii)
any loss of or damage or injury to any person (including death resulting
therefrom) or property occurring in, on or about the Leased Premises, regardless
of cause, except for any loss or damage covered by the all risk coverage
insurance required to be obtained by Landlord pursuant to Section 8.2 and except
and to the extent for that caused directly by Landlord's negligence or willful
misconduct. This provision shall survive the expiration or earlier termination
of this Lease.
SECTION 9.2. TENANT'S INSURANCE. Tenant shall carry general public
liability and property damage insurance, issued by one or more insurance
companies acceptable to Landlord, with the following minimum coverages:
A. Worker's Compensation: minimum statutory amount.
B. Commercial General Liability Insurance, including blanket, contractual
liability, broad form property damage, personal injury, completed operations,
products liability, and fire damage: Not less than $3,000,000 Combined Single
Limit for both bodily injury and property damage.
C. All Risk Coverage, Vandalism and Malicious Mischief, and Sprinkler Leakage
insurance, if applicable, for the full cost of replacement of Tenant's property.
D. Business interruption insurance.
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The insurance policies shall protect Tenant and Landlord as their interests may
appear, naming Landlord and Landlord's managing agent and mortgagee as
additional insureds, and shall provide that they may not be canceled on less
than thirty (30) days' prior written notice to Landlord. Tenant shall furnish
Landlord with Certificates of Insurance evidencing all required coverages on or
before the Commencement Date. If Tenant fails to carry such insurance and
furnish Landlord with such Certificates of Insurance after a request to do so,
Landlord may obtain such insurance and collect the cost thereof from Tenant.
ARTICLE 10 - EMINENT DOMAIN
If all or any substantial part of the Building or common areas shall be acquired
by the exercise of eminent domain, Landlord may terminate this Lease by giving
written notice to Tenant on or before the date that actual possession thereof is
so taken. If all or any part of the Leased Premises shall be acquired by the
exercise of eminent domain so that the Leased Premises shall become unusable by
Tenant for the Permitted Use in Tenant's reasonable business judgment, Tenant
may terminate this Lease as of the date that actual possession thereof is so
taken by giving written notice to Landlord. All damages awarded shall belong to
Landlord; provided, however, that Tenant may claim dislocation damages if such
amount is not subtracted from Landlord's award.
ARTICLE 11 - ASSIGNMENT AND SUBLEASE
Tenant shall not assign this Lease or sublet the Leased Premises in whole or in
part without Landlord's prior written consent, which consent shall not be
unreasonably withheld, delayed or denied (provided that it shall not be
unreasonable for Landlord to withhold or deny its consent with respect to any
proposed assignment or subletting to a third party that is already a tenant in
the Building or in another building owned by Landlord in the vicinity). In the
event of any assignment or subletting, Tenant shall remain primarily liable
hereunder, and any extension, expansion, rights of first offer, rights of first
refusal or other options granted to Tenant under this Lease shall be rendered
void and of no further force or effect. The acceptance of rent from any other
person shall not be deemed to be a waiver of any of the provisions of this Lease
or to be a consent to the assignment of this Lease or the subletting of the
Leased Premises. Without in any way limiting Landlord's right to refuse to
consent to any assignment or subletting of this Lease, Landlord reserves the
right to refuse to give such consent if in Landlord's reasonable opinion, (i)
the Leased Premises are or may be in any way adversely affected; (ii) the
business reputation of the proposed assignee or subtenant is unacceptable; or
(iii) the combined financial worth of the proposed assignee or subtenant and
Tenant is insufficient to meet the obligations hereunder. Landlord further
expressly reserves the right to refuse to give its consent to any subletting if
(i) the proposed subtenant or assignee is an existing tenant of Landlord's and
the proposed rent is to be less than the then current rent for similar premises
of Landlord's in the vicinity or (ii) the proposed subtenant or assignee is not
an existing tenant of Landlord's and the proposed rent is to be less than
seventy percent (70%) of the then current rent for similar premises of
Landlord's in the vicinity. Tenant agrees to reimburse Landlord for reasonable
accounting and attorneys' fees incurred in conjunction with the processing and
documentation of any such requested
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assignment, subletting or any other hypothecation of this Lease or Tenant's
interest in and to the Leased Premises.
ARTICLE 12 - TRANSFERS BY LANDLORD
SECTION 12.1. SALE OF THE BUILDING. Landlord shall have the right to sell the
Building at any time during the Lease Term, subject only to the rights of Tenant
hereunder; and such sale shall operate to release Landlord from liability
hereunder accruing after the date of such conveyance.
SECTION 12.2. SUBORDINATION AND ESTOPPEL CERTIFICATE. Landlord shall
have the right to subordinate this Lease to any mortgage presently existing or
hereafter placed upon the Building by so declaring in such mortgage. Within ten
(10) days following receipt of a written request from Landlord, Tenant shall
execute and deliver to Landlord, without cost, any reasonable instrument which
Landlord deems necessary or desirable to confirm the subordination of this Lease
and an estoppel certificate in such form as Landlord may reasonably request
certifying (i) that this Lease is in full force and effect and unmodified or
stating the nature of any modification, (ii) the date to which rent has been
paid, (iii) that there are not, to Tenant's knowledge, any uncured defaults or
specifying such defaults if any are claimed, and (iv) any other matters or state
of facts reasonably required respecting the Lease. Such estoppel may be relied
upon by Landlord and by any purchaser or mortgagee of the Building.
Notwithstanding the foregoing, if the mortgagee shall take title to the Leased
Premises through foreclosure or deed in lieu of foreclosure, Tenant shall be
allowed to continue in possession of the Leased Premises as provided for in this
Lease so long as Tenant shall not be in Default.
ARTICLE 13 - DEFAULT AND REMEDY
SECTION 13.1 DEFAULT. The occurrence of any of the following shall be a
"Default":
(a) Tenant fails to pay any Monthly Rental Installment or Additional
Rent within five (5) days after the same is due, or Tenant fails to pay any
other amounts due Landlord from Tenant within ten (10) days after the same is
due.
(b) Tenant fails to perform or observe any other term, condition,
covenant or obligation required under this Lease for a period of thirty (30)
days after notice thereof from Landlord; provided, however, that if the nature
of Tenant's default is such that more than thirty days are reasonably required
to cure, then such default shall be deemed to have cured if Tenant commences
such performance within said thirty-day period and thereafter diligently
completes the required action within a reasonable time.
(c) Tenant shall assign or sublet all or a portion of the Leased
Premises in contravention of the provisions of Article 11 of this Lease.
(d) All or substantially all of Tenant's assets in the Leased Premises
or Tenant's interest in this Lease are attached or levied under execution (and
Tenant does not discharge the same within sixty (60) days thereafter); a
petition in bankruptcy, insolvency or for reorganization
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or arrangement is filed by or against Tenant (and Tenant fails to secure a
stay or discharge thereof within sixty (60) days thereafter); Tenant is
insolvent and unable to pay its debts as they become due; Tenant makes a
general assignment for the benefit of creditors; Tenant takes the benefit of
any insolvency action or law; the appointment of a receiver or trustee in
bankruptcy for Tenant or its assets if such receivership has not been vacated
or set aside within thirty (30) days thereafter; or, dissolution or other
termination of Tenant's corporate charter if Tenant is a corporation.
SECTION 13.2. REMEDIES. Upon the occurrence of any Default, Landlord
shall have the following rights and remedies, in addition to those allowed by
law or in equity, any one or more of which may be exercised without further
notice to Tenant:
(a) Landlord may apply the Security Deposit or re-enter the Leased
Premises and cure any default of Tenant, and Tenant shall reimburse Landlord as
additional rent for any costs and expenses which Landlord thereby incurs; and
Landlord shall not be liable to Tenant for any loss or damage which Tenant may
sustain by reason of Landlord's action.
(b) Landlord may terminate this Lease or, without terminating this
Lease, terminate Tenant's right to possession of the Leased Premises as of the
date of such Default, and thereafter (i) neither Tenant nor any person claiming
under or through Tenant shall be entitled to possession of the Leased Premises,
and Tenant shall immediately surrender the Leased Premises to Landlord; and (ii)
Landlord may re-enter the Leased Premises and dispossess Tenant and any other
occupants of the Leased Premises by any means and may remove their effects,
without prejudice to any other remedy which Landlord may have. Upon the
termination of this Lease, Landlord may declare the present value (discounted at
the Prime Rate) of all rent which would have been due under this Lease for the
balance of the Lease Term, less the present value of the net amount of such rent
and other charges for the remainder of the Lease Term which Landlord determines
could reasonably be recovered by Landlord from reletting the Leased Premises
under then current and reasonably anticipated market conditions, together with
all loss or damage which Landlord may sustain by reason of Tenant's default
("Default Damages"), which shall include without limitation reasonable expenses
of preparing the Leased Premises for re-letting, demolition, repairs, tenant
finish improvements, brokers' commissions and attorneys' fees, it being
expressly understood and agreed that the liabilities and remedies specified in
this subsection (b) shall survive the termination of this Lease.
(c) Landlord may, without terminating this Lease, re-enter the Leased
Premises and re-let all or any part thereof for a term different from that which
would otherwise have constituted the balance of the Lease Term and for rent and
on terms and conditions different from those contained herein, whereupon Tenant
shall be immediately obligated to pay Landlord as liquidated damages the present
value (discounted at the Prime Rate) of the difference between the rent provided
for herein and that provided for in any lease covering a subsequent re-letting
of the Leased Premises, for the period which would otherwise have constituted
the balance of the Lease Term, together with all of Landlord's Default Damages.
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(d) Landlord may xxx for injunctive relief or to recover damages for
any loss resulting from the Default.
SECTION 13.3. LANDLORD'S DEFAULT AND TENANT'S REMEDIES. Landlord shall
be in default if it fails to perform any term, condition, covenant or obligation
required under this Lease for a period of thirty (30) days after written notice
thereof from Tenant to Landlord; provided, however, that if the term, condition,
covenant or obligation to be performed by Landlord is such that it cannot
reasonably be performed within thirty days, such default shall be deemed to have
been cured if Landlord commences such performance within said thirty-day period
and thereafter diligently undertakes to complete the same. Upon the occurrence
of any such default, Tenant may xxx for injunctive relief or to recover damages
for any loss directly resulting from the breach, but Tenant shall not be
entitled to terminate this Lease or withhold, offset or xxxxx any sums due
hereunder except pursuant to an order from a court of competent jurisdiction.
SECTION 13.4. LIMITATION OF LANDLORD'S LIABILITY. If Landlord shall
fail to perform any term, condition, covenant or obligation required to be
performed by it under this Lease and if Tenant shall, as a consequence thereof,
recover a money judgment against Landlord, Tenant agrees that it shall look
solely to Landlord's right, title and interest in and to the Building for the
collection of such judgement; and Tenant further agrees that no other assets of
Landlord shall be subject to levy, execution or other process for the
satisfaction of Tenant's judgment.
SECTION 13.5. NONWAIVER OF DEFAULTS. Neither party's failure or delay
in exercising any of its rights or remedies or other provisions of this Lease
shall constitute a waiver thereof or affect its right thereafter to exercise or
enforce such right or remedy or other provision. No waiver of any default shall
be deemed to be a waiver of any other default. Landlord's receipt of less than
the full rent due shall not be construed to be other than a payment on account
of rent then due, nor shall any statement on Tenant's check or any letter
accompanying Tenant's check be deemed an accord and satisfaction. No act or
omission by Landlord or its employees or agents during the Lease Term shall be
deemed an acceptance of a surrender of the Leased Premises, and no agreement to
accept such a surrender shall be valid unless in writing and signed by Landlord.
SECTION 13.6. ATTORNEYS' FEES. If either party defaults in the
performance or observance of any of the terms, conditions, covenants or
obligations contained in this Lease and the non-defaulting party obtains a
judgment against the defaulting party, then the defaulting party agrees to
reimburse the non-defaulting party for reasonable attorneys' fees incurred in
connection therewith.
ARTICLE 14 - LANDLORD'S RIGHT TO RELOCATE TENANT
[Intentionally Omitted.]
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ARTICLE 15 - TENANT'S RESPONSIBILITY REGARDING
ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES
SECTION 15.1 DEFINITIONS.
(a) "Environmental Laws" - All present or future federal, state and
municipal laws, ordinances, rules and regulations applicable to the
environmental and ecological condition of the Leased Premises, the rules and
regulations of the Federal Environmental Protection Agency or any other federal,
state or municipal agency or governmental board or entity having jurisdiction
over the Leased Premises.
(b) "Hazardous Substances" - Those substances included within the
definitions of "hazardous substances," "hazardous materials," "toxic
substances," "solid waste" or "infectious waste" under Environmental Laws.
SECTION 15.2. COMPLIANCE. Tenant, at its sole cost and expense, shall
promptly comply with the Environmental Laws including any notice from any source
issued pursuant to the Environmental Laws or issued by any insurance company
which shall impose any duty upon Tenant with respect to the use, occupancy,
maintenance or alteration of the Leased Premises whether such notice shall be
served upon Landlord or Tenant.
SECTION 15.3. RESTRICTIONS ON TENANT. Tenant shall operate its business
and maintain the Leased Premises in compliance with all Environmental Laws.
Tenant shall not cause or permit the use, generation, release, manufacture,
refining, production, processing, storage or disposal of any Hazardous
Substances on, under or about the Leased Premises, or the transportation to or
from the Leased Premises of any Hazardous Substances, except as necessary and
appropriate for its Permitted Use in which case the use, storage or disposal of
such Hazardous Substances shall be performed in compliance with the
Environmental Laws and the standards prevailing in the industry.
SECTION 15.4. NOTICES, AFFIDAVITS, ETC. Tenant shall immediately notify
Landlord of (i) any violation by Tenant, its employees, agents, representatives,
customers, invitees or contractors of the Environmental Laws on, under or about
the Leased Premises or (ii) the presence or suspected presence of any Hazardous
Substances on, under or about the Leased Premises and shall immediately deliver
to Landlord any notice received by Tenant relating to (i) and (ii) above from
any source. Tenant shall execute affidavits, representations and the like within
five (5) days of Landlord's request therefor concerning Tenant's best knowledge
and belief regarding the presence of any Hazardous Substances on, under or about
the Leased Premises.
SECTION 15.5. LANDLORD'S RIGHTS. Landlord and its agents shall have the
right, but not the duty, upon advance notice (except in the case of emergency
when no notice shall be required) to inspect the Leased Premises and conduct
tests thereon to determine whether or the extent to which there has been a
violation of Environmental Laws by Tenant or whether there are Hazardous
Substances on, under or about the Leased Premises. In exercising its rights
herein, Landlord shall use reasonable efforts to minimize interference with
Tenant's business but such
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entry shall not constitute an eviction of Tenant, in whole or in part, and
Landlord shall not be liable for any interference, loss, or damage to
Tenant's property or business caused thereby.
SECTION 15.6. TENANT'S INDEMNIFICATION. Tenant shall indemnify Landlord
and Landlord's managing agent from any and all claims, losses, liabilities,
costs, expenses and damages, including attorneys' fees, costs of testing and
remediation costs, incurred by Landlord in connection with any breach by Tenant
of its obligations under this Article 15. The covenants and obligations under
this Article 15 shall survive the expiration or earlier termination of this
Lease.
SECTION 15.7. LANDLORD'S REPRESENTATION. Notwithstanding anything
contained in this Article 15 to the contrary, Tenant shall not have any
liability to Landlord under this Article 15 resulting from any conditions
existing, or events occurring, or any Hazardous Substances existing or
generated, at, in, on, under or in connection with the Leased Premises prior to
the Commencement Date of this Lease except to the extent Tenant exacerbates the
same.
ARTICLE 16 - MISCELLANEOUS
SECTION 16.1. BENEFIT OF LANDLORD AND TENANT. This Lease shall inure to the
benefit of and be binding upon Landlord and Tenant and their respective
successors and assigns.
SECTION 16.2. GOVERNING LAW. This Lease shall be governed in accordance
with the laws of the State where the Building is located.
SECTION 16.3. GUARANTY. In consideration of Landlord's leasing the
Leased Premises to Tenant, Tenant shall provide Landlord with a Guaranty of
Lease executed by the guarantor(s) described in the Basic Lease Provisions, if
any.
SECTION 16.4. FORCE MAJEURE. Landlord and Tenant (except with respect
to the payment of any monetary obligation) shall be excused for the period of
any delay in the performance of any obligation hereunder when such delay is
occasioned by causes beyond its control, including but not limited to work
stoppages, boycotts, slowdowns or strikes; shortages of materials, equipment,
labor or energy; unusual weather conditions; or acts or omissions of
governmental or political bodies.
SECTION 16.5. EXAMINATION OF LEASE. Submission of this instrument for
examination or signature to Tenant does not constitute a reservation of or
option for Lease, and it is not effective as a Lease or otherwise until
execution by and delivery to both Landlord and Tenant.
SECTION 16.6. INDEMNIFICATION FOR LEASING COMMISSIONS. The parties
hereby represent and warrant that the only real estate brokers involved in the
negotiation and execution of this Lease are the Brokers. Each party shall
indemnify the other from any and all liability for the breach of this
representation and warranty on its part and shall pay any compensation to any
other broker or person who may be entitled thereto.
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SECTION 16.7. NOTICES. Any notice required or permitted to be given
under this Lease or by law shall be deemed to have been given if it is written
and delivered in person or by overnight courier or mailed by certified mail,
postage prepaid, to the party who is to receive such notice at the address
specified in Article 1. If delivered in person, notice shall be deemed given as
of the delivery date. If sent by overnight courier, notice shall be deemed given
as of the first business day after sending. If mailed, the notice shall be
deemed to have been given on the date which is three business days after
mailing. Either party may change its address by giving written notice thereof to
the other party.
SECTION 16.8. PARTIAL INVALIDITY; COMPLETE AGREEMENT. If any provision
of this Lease shall be held to be invalid, void or unenforceable, the remaining
provisions shall remain in full force and effect. This Lease represents the
entire agreement between Landlord and Tenant covering everything agreed upon or
understood in this transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof or in effect between the
parties. No change or addition shall be made to this Lease except by a written
agreement executed by Landlord and Tenant.
SECTION 16.9. FINANCIAL STATEMENTS. During the Lease Term and any
extensions thereof, Tenant shall provide to Landlord on an annual basis, within
ninety (90) days following the end of Tenant's fiscal year, a copy of Tenant's
most recent financial statements (certified and audited if the Minimum Annual
Rent hereunder exceeds $100,000.00) prepared as of the end of Tenant's fiscal
year. Such financial statements shall be signed by Tenant who shall attest to
the truth and accuracy of the information set forth in such statements. All
financial statements provided by Tenant to Landlord hereunder shall be prepared
in conformity with generally accepted accounting principles, consistently
applied.
SECTION 16.10. REPRESENTATIONS AND WARRANTIES. The undersigned
represent and warrant that (i) such party is duly organized, validly existing
and in good standing (if applicable) in accordance with the laws of the state
under which it was organized; and (ii) the individual executing and delivering
this Lease has been properly authorized to do so, and such execution and
delivery shall bind such party.
SECTION 16.11. SIGNS. Tenant may, at its own expense, erect a sign
concerning the business of Tenant which shall be in keeping with the decor and
other signs on the Building. All signage (including the signage described in the
preceding sentence) in or about the Leased Premises shall be first approved by
Landlord, which approval shall not be unreasonably withheld, conditioned or
delayed, and shall be in compliance with the applicable codes and any recorded
restrictions applicable to the Building. Tenant agrees to maintain any sign in
good state of repair, and upon expiration of the Lease Term, Tenant agrees to
promptly remove such signs and repair any resulting damage to the Leased
Premises or the Building.
SECTION 16.12. CREDIT ENHANCEMENT. In addition to the Security Deposit
specified in Section 1(I) hereof and consistent with the provisions of that
certain Guaranty of Lease granted by Guarantor and executed simultaneously
herewith, Tenant shall provide Landlord with credit enhancement as follows:
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(a) Upon execution of this Lease, Tenant shall provide to Landlord an
irrevocable, unconditional Letter of Credit in the form attached hereto as
EXHIBIT C. The Letter of Credit shall be in the amount of Eighty Thousand
Dollars ($80,000.00) ("Initial Letter of Credit") and shall constitute
additional security for the full and faithful performance by Tenant of all the
terms, conditions and covenants contained in the Lease on the part of the Tenant
to be performed, including but not limited to the payment of rent.
(b) No later than February 1, 2000, Tenant shall provide to Landlord an
additional Irrevocable Letter of Credit, also in the form attached hereto as
EXHIBIT C. The second Letter of Credit shall be in the amount of Eighty Thousand
Dollars ($80,000.00) ("Second Letter of Credit") and shall also constitute
additional security for the full and faithful performance by Tenant of all the
terms, conditions and covenants contained in the Lease on the part of the Tenant
to be performed, including but not limited to the payment of rent. The Initial
Letter of Credit and the Second Letter of Credit shall be collectively referred
to as the "Letters."
(c) Landlord shall have the right to draw upon the Letters in the event
of a Tenant default beyond the expiration of any notice, grace or cure period
provided for under this Lease.
(d) Landlord shall be entitled to retain the Letters only in accordance
with the provisions of the Guaranty of Lease (a copy of which is attached hereto
as EXHIBIT D).
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and year first above written.
LANDLORD:
DUKE-WEEKS REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership
By: Duke-Weeks Realty Corporation,
its general partner
By:____________________________
Xxxxxx X. Xxxxxxx
Senior Vice President
Minneapolis Industrial
TENANT:
INTERNATIONALE SHOPPING ALLIANCE,
INC., a Minnesota corporation
By_____________________________
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Printed:_________________
Title:___________________
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STATE OF____________________)
) ss.
COUNTY OF___________________)
Before me, a Notary Public in and for said County and State, personally
appeared ___________________, by me known and by me known to be the
______________ of INTERNATIONALE SHOPPING ALLIANCE, INC., a Minnesota
corporation, who acknowledged the execution of the above and foregoing Lease
Agreement for and on behalf of said corporation.
WITNESS my hand and Notarial Seal this ___ day of _____________, 1999.
Notary Public______________________
(Printed Signature)________________
My Commission Expires: ____________
My County of Residence: ___________
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